The Contractor's Guide to Job Costing: Stop Guessing Your Margins

Here's a scary truth: most contractors know their total revenue but have no idea what each individual job actually costs them. They think they're making 20% margins, but when you factor in all the hidden costs — callbacks, change orders, material waste, unbilled hours — they're actually at 8%. Sound familiar?

What Is Job Costing?

Job costing is the practice of tracking all costs associated with a specific project — materials, labor, subcontractors, equipment, permits, and overhead — so you know exactly how much profit (or loss) each job generates.

The Three Layers of Cost Tracking

Effective job costing tracks three numbers for every cost category: Estimated (what you bid), Committed (POs and sub contracts you've signed), and Actual (what you've actually spent). The gap between these three numbers tells you exactly where your project stands financially.

Getting Started

Start by creating cost codes for your most common expense categories: rough materials, finish materials, labor by trade, subcontractors, equipment rental, permits, and overhead allocation. Then track every expense against these codes. Kaliun makes this easy with built-in cost code tracking and real-time budget dashboards.